The Indian Biogas Association (IBA) has welcomed the central government’s decision to revise the procurement price of compressed biogas (CBG), calling it a positive step for the bioenergy sector. The petroleum ministry has increased the procurement rate from Rs 1,380 to Rs 1,478 per MMBTU, effective June 1 through October 31, 2025.
The association, however, noted that the hike falls short of industry expectations and reiterated the need for a more substantial increase to reflect production realities and support the sector’s long-term viability.
Industry calls for premium pricing and green certification
Gaurav Kedia, Chairman of the IBA, stated that while the revised price aligns better with the operational challenges of CBG developers, it still does not fully account for the economic potential and environmental benefits of compressed biogas. He stressed the importance of awarding a premium to “the greener molecule,” noting that parity with CNG has only been reached at the pre-tax level.
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Kedia also recommended that the government implement a green certification framework combined with a cap-and-trade system for companies with higher carbon footprints. Such mechanisms, he said, would incentivize broader adoption of bioenergy and reinforce India’s climate goals.
Boost for rural growth, MSMEs, and clean energy goals
The IBA emphasized that a further upward revision in procurement price could significantly improve return on investment for entrepreneurs, especially MSMEs operating in rural India. Enhanced pricing would also help attract institutional finance and foreign direct investment into the biogas sector.
The association added that scaling decentralized CBG production aligns with national objectives around clean mobility, waste management, and energy self-reliance. The latest price hike, while moderate, signals growing policy support for India’s circular economy transition and for cleaner fuel adoption across the country.